Joe Cahill On Business

Which CEOs are in the over-$20-million club?

The next meeting of the $20 million club will be an intimate gathering.

Only two local CEOs collected enough last year to qualify for membership, down from five in 2014. Sandeep Mathrani of General Growth Properties and Richard Gonzalez of AbbVie made the cut, although Mathrani is in a class by himself with an outsize $39 million pay package. Gonzalez actually took a 5 percent cut to $20.8 million, largely due to the vagaries of pension accounting.

Outside the velvet ropes is a gaggle of A-listers who fell just short in 2015. Boeing's James McNerney, who stepped down as CEO on July 1 after capturing top honors in 2014, pocketed $19.9 million last year. Fellow retiree Patricia Woertz, who handed off the CEO title at Archer Daniels Midland on Jan. 1, 2015, but remained chairman through year-end, got $19.8 million. Irene Rosenfeld of Mondelez International ticked down 6 percent to $19.7 million, while Miles White's 9.6 percent raise left the Abbott Laboratories boss a bit light at $19.4 million.

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Gonzalez was the only 2014 honoree who made it back to the winner's circle last year. Dropping back were McNerney, Rosenfeld, Deere's Sam Allen and Peter Liguori of Tribune Media.

Smaller paychecks for these limelighters reflected a broader decline across corporate Chicago. Median compensation for CEOs of local companies declined 6.1 percent to $5 million in 2015, according to proxy data compiled by ISS Corporate Solutions. Nationally, median CEO pay went the other direction, rising 4.6 percent to $4.1 million.

Illinois and its chief executives are suffering for its reliance on heavy industry. Big manufacturers Caterpillar, Deere, Illinois Tool Works and others struggled last year as overseas economies slowed and the U.S. dollar strengthened. “Eleven of the 37 companies that saw a pay decline were capital goods companies,” notes ISS Executive Director John Roe.

At Moline-based Deere, for example, Allen's compensation dropped 8 percent to $18.7 million as sales plunged at the agricultural equipment manufacturer. Dover, a diversified manufacturer based in Downers Grove, whacked CEO Robert Livingston's pay 38 percent to $8.3 million.

It wasn't all bad news, however, for the people at the very top. Some local CEOs got big raises last year. None was bigger than Mathrani's 702 percent increase from $4.9 million in 2014. The biggest chunk of his 2015 pay was a one-time $25 million grant of stock units under a new five-year employment agreement signed in February 2015. The award vests in a single tranche if Mathrani is still with Chicago-based General Growth in five years.

Another big winner was Mary Dillon, CEO of cosmetics retailer Ulta Beauty in Bolingbrook. She soared to No. 6 on ISS' Chicago list, as a 200 percent raise boosted her total compensation to $18.6 million from $6.2 million in 2014. Like Mathrani, Dillon received a big equity grant last year. Hers took the form of $13.9 million in stock options vesting over six years.

Both Dillon and Mathrani have earned big paydays. Ulta shares are up 115 percent since Dillon took over in 2013, outpacing a 28 percent rise for the S&P 500 during that span. General Growth stock has climbed 93 percent during Mathrani's five-year tenure, while the S&P gained 67 percent.

But the long-term grants they received last year go a step beyond a yearly bonus or incentive, committing General Growth and Ulta to big payouts over an uncertain future. Maybe Dillon and Mathrani will continue to outperform. On the other hand, maybe they won't. Why not wait for the results to come in?

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